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Economic Debate: Rs 100 Billion Discrepancy in Mauritius’ GDP Figures

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Economic Debate: Rs 100 Billion Discrepancy in Mauritius' GDP Figures

A debate is brewing over the Gross Domestic Product (GDP) of Mauritius, with the Ministry of Finance estimating a figure of Rs 651.7 billion in 2023, while some economists question the accuracy of this figure.

According to Minister of Finance Renganaden Padayachy, the government’s strategy is aiming to reach a GDP of Rs 1 trillion by 2030.

Statistics Mauritius, however, projected a GDP of Rs 708.8 billion for 2024, representing an increase of 8.8% compared to the 2023 figure.

After adjusting for price changes, the GDP growth rate is expected to be 4.9%, which is lower than the 7% growth rate in 2023.

Not everyone agreed with the government’s calculation of the GDP, however. Dr. Rama Sithanen, a former Finance Minister, has criticized the Ministry of Finance for using a different method of calculating the GDP.

According to him, the ministry includes the “net primary income” in its calculation, which is derived from Global Business Companies investing through Mauritius but not within the country. This has led to a discrepancy of approximately Rs 100 billion.

Dr. Sithanen argued that this practice artificially inflates the country’s services exports and, subsequently, its GDP.

He pointed out that Statistics Mauritius’ data shows that services exports generated Rs 149 billion in 2019, while the GDP at market prices was Rs 512 billion.

In contrast, data from the Bank of Mauritius indicates that services exports generated Rs 104 billion.

The difference in figures has led to concerns about the accuracy of the country’s economic data.

The World Bank and the International Monetary Fund (IMF) have recommended excluding “net primary income” from the calculation of services exports and including it in the balance of payments instead.

In conclusion, while the government projected a GDP of Rs 1 trillion by 2030, some economists question the accuracy of this figure due to differences in calculation methods and discrepancies in data.

The debate highlighted the importance of transparency and consistency in economic data reporting.

What is Gross Domestic Product (GDP)?

GDP is a measure of the total value of all goods and services produced within a country’s borders over a specific period, usually a year. It is a broad indicator of a country’s economic activity and is calculated by adding up the value of all goods and services produced within the country before deducting capital consumption.

Source: Defi Media

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